ASSEMBLY APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

ASSEMBLY, No. 3480

 

STATE OF NEW JERSEY

 

DATED: †DECEMBER 15, 2014

 

††††† The Assembly Appropriations Committee reports favorably Assembly Bill No. 3480.

††††† This bill eliminates consumer data collection requirements imposed on retailers issuing certain gift cards.

††††† Current law provides that qualified stored value card proceeds escheat to the State after five years of inactivity. As a counterpart to this policy, an issuer of a stored value card is required to collect the name and address of the purchaser or owner of the card. Pursuant to this requirement, issuers are to maintain a record which includes at a minimum the consumerís zip code. Under the provisions of the law, the data collection requirement does not take effect until July 2016.

††††† Under current law, qualified stored value card proceeds escheat to the State after five years of inactivity.† As a counterpart to this policy, merchants are required to collect the name and address of the consumer and maintain a record thereto recording, at a minimum, the consumerís zip code.

††††† This bill eliminates the requirement that merchants collect the name and address of qualifying stored value card consumers and related record retention requirements ahead of its required implementation.

††††† As reported, this bill is identical to Senate Bill No. 2235, as also reported by the committee.

 

FISCAL IMPACT:

††††† The Office of Legislative Services (OLS) forecasts the legislation to have no fiscal impact prior to FY 2023 and to lower Unclaimed Personal Property Trust Fund collections by $17.5 million to $26.3 million in FY 2023.† Thereafter, the OLS expects the revenue loss to grow by 7.6 percent per year.† It is unclear what portion of the revenue that would accrue, absent the billís enactment, the Department of the Treasury would elect to transfer to the General Fund as State revenue.

††††† The State revenue loss will occur because the bill will deprive the State in many instances of purchaser information and thus limit the Stateís ability to assert jurisdiction over many unused stored value cards under federal priority rules governing statesí competing claims to abandoned property. Without jurisdiction, in turn, the State cannot initiate escheat action under the Stateís unclaimed property laws with respect to concerned unused stored value card balances. After the enactment of this bill the State will have the legal authority to take custodial possession of unexpended balances only on stored value cards for which card issuers voluntarily collect purchaser information.

††††† The OLS anticipates that the bill will produce an annual State revenue loss starting in FY 2023. †Under existing law card issuers must begin in July 2016 to collect data identifying the purchasersí residence, information that is a prerequisite for the State to establish jurisdiction over unused stored value card balances. Once card issuers have purchaser information, they must report unexpended card balances to the State after five years of inactivity, or in July 2021 for the first batch of gift card balances deemed abandoned under the current customer information collection requirement.† As card issuers have until November in the following fiscal year to transfer to the State the accumulated balances that were deemed abandoned in a given fiscal year, the State will not take custodial possession of the first cohort of unexpended card balances under the current customer information collection requirement until November 2022, or in FY 2023.